Economic problems can hit a business, regardless of the size of the company, at any time, as many business owners in Ohio know well. This is particularly true if an item that the company produces is found to be faulty or to have injured those who use it. This is what happened to a global company that caused it to accumulate business debt and to file a bankruptcy in, not one, but two countries.
The company, Takata, makes air bags for cars and other safety equipment. It has been in business since 1933 and has its North American headquarters in another state here in the United States. The company began to suffer large economic losses and take on high business debt when it was discovered to have created air bag systems that can explode when they become too full of air in a crash. The explosions have led to deaths and injury to car owners, a recent report asserted.
The company says that it filed the business bankruptcy to ensure that it could continue the replacement program that it agreed to after the faulty air bag discovery. In addition, it is reportedly about to be purchased by a Chinese company for $1.6 billion. The automakers who installed the airbags will likely be responsible for much of the cost of the replacements, the report suggested after the business bankruptcy.
As for companies in Ohio, when a situation overwhelms a business and creates what seems to be an insurmountable business debt, a business bankruptcy can be a good choice. This can help to protect many aspects of the business, as was the case for Takata, and may help to preserve value for creditors. The good news is that, in many cases, businesses are able to recover from this type of action and find that they are stronger and able to return to a growth model relatively quickly.
Source: WFMJ.com, "Air bag maker Takata files for bankruptcy in Japan, US", Tom Krisher and Marcy Gordon, June 25, 2017